The demand for augmented reality and virtual hardware has never been higher since the pandemic forced us to work and socialize remotely. While the Metaverse is still in its infancy, Apple, Meta, and General Electric (GE) are just a few of the companies involved in the hardware space.

– Apple is preparing to launch an AR/VR headset in 2023 to compete with Meta‘Quest Products

– Zuckerberg doubled down on his pledge to invest billions in building the metaverse

– Both tech giants are favored by the HANetf ETC Group Global Metaverse UCITS ETF

As more companies look to monetize the metaverse, companies like Apple [AAPL], Meta [META] and GE Healthcare [GE] develop hardware to allow people to interact with virtual elements in different contexts.

Virtual reality (VR) and augmented reality (AR) – the overlaying of virtual information on the real world – are the foundation of metaverse projects.

Last week, Meta‘The Quest 2 VR headset has hit shelves in Germany for the first time in two years, following the resolution of a dispute with the country‘s antitrust watchdog.

Apple is roaring into the arena with a mixed reality headset (a combination of AR and VR), which is expected to launch next year. This‘Will be the Cupertino company‘s first major new product launch since the release of the Apple Watch in 2015.

GE Healthcare, which will be spun off and is expected to start trading under the symbol GEHC from January 4, will use startup MediView‘s AR headset to help surgeons better visualize a patient‘anatomy.

Meta’s stock price is up 1.5% in the last month to December 12; Apple stock price down 3.5%; GE’s share price is down 3.6%.

AR/VR hardware to boost service revenue

While there was‘There’s a lot of excitement around AR and VR, Meta is a cautionary tale of the risks of investing in present metavers. Its Reality Labs division saw a 49% drop in year-over-year revenue to $286 million in the third quarter (Q3) of 2022 – lower sales of the Quest 2 headset were to blame. The unit also posted a loss of $3.7 billion in the third quarter compared to a loss of $2.8 billion in the previous quarter. Investors will be watching how the Quest 2 fares in Germany this quarter and whether lifting the requirement for users to create a Facebook account will impact sales.

Apple‘s business in AR and VR is expected to increase its services revenue, according to Anisha Bhatia, senior analyst at GlobalData. The segment grew only 5% in the quarter ended Sept. 24 to $19.2 billion, but accounted for 21.3% of total sales of $90.1 billion.

Despite Meta‘After the Reality Labs losses, Mark Zuckerberg is determined to move forward and lead the building of the metaverse. Spending grew 24% year-over-year in Q3 and is expected to “increase significantly” next year.

Ark Invest’s associate portfolio manager, Sam Korus, argued in the firm‘s newsletter which “if AR and VR do not adapt to the mass market, Meta‘The current pace of investment could be a colossal mistake.”

The question for Apple is whether it can finally challenge Meta‘s Quest helmets. Bhatia pointed out that Apple “rarely releases a product that doesn’t live up to its standards,” so don’t worry about the quality of AR and VR experiences.

Bhatia argued that while spending may be a challenge for Apple at first, the company‘s delivery history “expensive market-leading products” inspire confidence in consumers, proving right “believe that Apple‘s first foray into the VR headset segment will be a success.”

GE Healthcare won‘t directly develop or sell AR headsets. However, having them as part of its offering could lead to more hospitals paying for the company.‘s products and services.

Target funds: HANetf ETC Group Global Metaverse UCITS ETF

All of the major thematic metaverse funds have exposure to both Apple and Meta, but none hold GE.

Meta is the second largest holding in the HANetf ETC Group Global Metaverse UCITS ETF [METR.L] and Apple is the fifth largest. Their weightings are 4.76% and 4.46% respectively. The fund is down 15.8% since its launch on March 15 of this year and stable over the past month.

Apple is the third largest holding company in the Global X Metaverse ETF [VR], with a weighting of 8.30% as of December 12. Meta was awarded 2.31%. The fund is down 21.3% since its launch on March 18 this year and stable over the past month.

Roundhill Metaverse ETF [METV] Also favors Apple over Meta, which are its second and fifth largest holdings with weightings of 7.86% and 5.80%, respectively. The fund is down 46.4% year-to-date, but up 4.2% over the past month.